Making the leap to private practice
Private practice can take different forms.
Dr. Seefeldt opted for direct primary care, a model in which her patients pay a set monthly fee for care whenever needed. Her practice doesn’t take any insurance besides Medicaid.
“Direct primary care is about working directly with the patient and cost-conscious, transparent care,” she said. “And I don’t have to deal with insurance.”
For Dr. Patel, working with an accountable care organization made the transition easier. She owns her practice solo but works with a company called Privia for administrative needs. Privia sent a consultant to set up her office in the company’s electronic medical record. Things were up and running within the first week.
Dr. Maniya joined his mother’s practice, easing his way in over 18 months.
And then there’s what Milford did, building a private practice from the ground up.
“We did a lot of Googling, a lot of meeting with accountants, meeting with small business development from the state of Wisconsin,” he said. “We asked people that were in business, ‘What are the things businesses fail on? Not medical practices, but businesses.’” All that research helped him launch successfully.
Making the dollars and cents add up
Moving from employment into private practice takes time, effort, and of course, money. How much of each varies depending on where you live, your specialty, whether you choose to rent or buy office space, staffing needs, and other factors.
Dr. Seefeldt, Dr. Patel, Dr. Milford, and Dr. Maniya illustrate the range.
- Dr. Seefeldt got a home equity loan of $50,000 to cover startup costs – and paid it back within 6 months.
- Purchasing EEG equipment added to Dr. Patel’s budget; she spent $130,000 of her own money to launch her practice in a temporary office and took out a $150,000 loan to finance the buildout of her final space. It took her 3 years to pay it back.
- When Dr. Milford left employment, he borrowed the buildout and startup costs for his practice from his father, a retired surgeon, to the tune of $500,000.
- Dr. Maniya assumed the largest risk. When he took over the family practice, he borrowed $1.5 million to modernize and build a new office. The practice has now quintupled in size. “It’s going great,” he said. “One of our questions is, should we pay back the loan at a faster pace rather than make the minimum payments?”
Several years in, Dr. Patel reports she’s easily making three to four times as much as she would have at a hospital. However, Dr. Maniya’s guaranteed compensation is 10% less than his old job.
“But as a partner in a private practice, if it succeeds, it could be 100%-150% more in a good year,” he said. On the flip side, if the practice runs into financial trouble, so does he. “Does the risk keep me up at night, give me heartburn? You betcha.”
Dr. Milford and Dr. Seefeldt have both chosen to take less compensation than they could, opting to reinvest in and nurture their practices.
“I love it,” said Dr. Milford. “I joke that I have half as much in my pocketbook, twice as much in my heart. But it’s not really half as much, 5 years in. If I weren’t growing the business, I’d be making more than before.”